Let’s face it, January is the worst month of the year…
Aside from the sudden absence of festive cheer (and cheese), it brings all manner of unpleasantries for our bank balances. From the looming 31 January self-assessment tax deadline to the arrival of credit card bills that seem to have magically multiplied since December, it’s a tough time for wallets everywhere.
But before you decide to hibernate until spring, know that you aren’t alone. The ‘January money hangover’ is a very real phenomenon, but it is curable. With a few smart tweaks and a bit of planning, you can get your finances back in shape for 2026.
Here’s our guide on how to survive the toughest month of the year and save money in January:
Start budgeting
If you only make one New Year’s resolution this year, make it about budgeting.
It’s all too easy to spend more than you have coming in, especially when you’re trying to make the most of the January sales. This often leads to overdraft fees or credit card charges that sting longer than a paper cut. In fact, MoneyHelper (formerly the Money Advice Service) estimates that a significant chunk of us never plan our finances, which can create real problems when money is tight.
You’ve probably seen countless articles, TV programmes, or TikToks about the benefits of budgeting and dismissed them as boring or unattainable. But trust us, it doesn’t have to be complicated. There are some really simple things you can do to keep your finances afloat without needing a degree in mathematics.
Building a money plan
There are some outgoings you simply have to cover – the weekly shop, mortgage or rent, utility bills, and Council Tax being the big ones. Others are easier to push to the back of your mind until it’s too late.
You can probably put home and car insurance into this category. With a solid budget in place, it’s easier to cover these expenses and live within your means. Of course, it is always a good idea to save a little extra to cover unexpected expenses, like a broken boiler or a sudden need for a winter coat that actually keeps you warm.
The first thing anyone in need of a budget must do is look for ways to cut back. This can be difficult, but it’s definitely not impossible. Food shopping is a major expense and one many of us can address without starving.
You can often save money by opting for own-brand products and by sticking rigidly to what you have on your shopping list. There’s a reason supermarkets place all the goodies by the tills – they know you’re going to be stuck there, queuing, bored, and tempted to pick up a treat. You’d probably be better off bulk buying a little more veg or meat and making casseroles or stews that will provide you with several meals.
Incidentally, this approach could save you a fortune on takeaways, provided you remember to get them out of the freezer before you’re hangry.
Sell, sell, sell
While you’re in the process of slashing your weekly shopping bill, why not raise some extra cash by selling your unwanted wares?
Online auctions and marketplaces such as eBay, Vinted, or Depop are probably the easiest way to get rid of items that are just getting in the way. Whether it’s an unwanted Christmas gift or a coat you haven’t worn since 2022, there is likely someone out there who wants it.
Sure, you could wait for the summer to declutter, get up with the Sunday dawn, and flog your unwanted things at a car boot sale. But why wait when you can do it all from the comfort of your own duvet?
Early mornings are overrated anyway.
Switch and slash
Summer is a long way off, so let’s concentrate on the here and now.
January is traditionally a quiet month, with a lot less on the social calendar than December (thankfully). It’s a good time to review your finances and consider whether you’d be better off switching banks or even your energy provider. You could save a pretty penny with relatively little effort.
It’s also worth contemplating what you spend each month on subscriptions. Do you really need three different video streaming services, a music subscription, and that gym membership you haven’t used since last January? Be ruthless. Cancel what you don’t use.
Finally, avoid the January sales if you can. They are designed to suck people into buying things they can live without. If you didn’t want it at full price in November, you probably don’t need it now just because it’s 20% off.
Try a ‘no spend’ day
If you struggle with impulse buying, this one is for you.
Try setting aside one day a week where you commit to spending absolutely nothing. No morning coffee on the commute, no meal deal for lunch, and definitely no late-night online shopping scrolling.
It forces you to be more organised – you’ll need to bring lunch from home and make your own coffee – but the savings can add up quickly. If you manage one day, why not try for two? It’s a challenge, but your bank balance will thank you.
Boost your income
Sometimes, cutting costs can only get you so far.
If you’ve trimmed the fat from your budget and still find yourself short, it might be time to look at the other side of the equation: your income. This could mean asking for a pay rise, taking on a side hustle, or finding a new role that pays a salary that matches your skills.
If you’re looking for ways to earn a bit of extra cash alongside your current role, check out our guide on five ways to supplement your income.
Second job tax: How much will I have to pay?
Frequently asked questions
How can I save money fast in January?
The quickest way to save money immediately is to pause all non-essential spending. This is often called a ‘financial fast’. For the month of January, commit to buying only essentials (food, bills, transport). Delete shopping apps from your phone to remove temptation and unsubscribe from marketing emails.
What is the 50/30/20 rule?
This is a popular budgeting method. You allocate 50% of your income to needs (rent, bills, food), 30% to wants (hobbies, dining out), and 20% to savings or debt repayment. In January, you might want to flip the ‘wants’ and ‘savings’ percentages to recover from Christmas.
How do I deal with debt in January?
If you are worried about debt, don’t ignore it. Contact the companies you owe money to as soon as possible – they may be able to freeze interest or set up a repayment plan. You can also get free, confidential advice from charities like StepChange or Citizens Advice.
Time to get started
Saving money in January doesn’t have to mean sitting in the dark eating baked beans (unless you really like baked beans).
It’s about being mindful of your spending, planning ahead, and making small changes that add up to a big difference.
By setting a budget, cutting unnecessary costs, and perhaps even decluttering your home for cash, you can turn the your January into a fresh financial start for 2026.
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